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The Week Ahead: Surveying the Market Landscape

The National Association of Home Builders (NAHB) will release its latest NAHB/Wells Fargo Housing Marketing Index on Thursday, August 15. 

July’s survey reported that shortages in labor and subcontractors continued to effect the industry. Labor shortages ranged from 47% for building maintenance managers to a high of 83% for framing crews. When averaged across the occupations followed by the NAHB since the 1990s, the index of shortages reached 69% in 2019—the highest number on record. 

Framing crews and rough carpenters showed the highest levels of “serious shortage,” according to the survey, at 34% and 28%, respectivley. Of the 16 occupations tracked by the NAHB, all but one —weatherization workers—had a serious shortage of more than 10%.

The release also shows that the shortages impact is “especially severe” when compared to housing starts, which have not yet fully recovered since 2011. Housing starts, however, have seen a moderate increase in recent years. The NAHB reports that since 2012, labor shortages grew from nearly 20% to the current 69%. 

When asked how shortages have impacted their businesses, 87% of those surveyed said it has forced them to provide higher wages, 81% have difficulty completing a project on time, and 75% say the shortage forces them to raise home prices. 

Additionally, 35% of respondents said the shortage has caused projects to be unprofitable, and 17% lost or cancelled sales. 

CoreLogic’s latest Case-Shiller U.S. National Home Price Index (HPI) revealed home prices rose 3.4% in May 2019. 

Las Vegas led the nation with a 6.4% year-over-year price increase, and was followed by Phoenix’s 5.7% increase. CoreLogic states that seven of the 20 cities in the composite reported higher price increases in the year ending May 2019 than the year ending April 2019. 

A report by Redfin also found that in June home prices rose 8.75 for the most affordable third of homes nationally. Home prices rose just 1.1% year-over-year for the most expensive homes.

 

Here's what else is happening in The Week Ahead:

 

CoreLogic Loan Performance Insights Report (Aug. 13) 

Census Bureau Residential Construction Survey (Aug. 16) 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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